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For months now, persistent rumors appearing in media reports and on a popular Internet site have suggested that Chicago’s Jenner & Block is hemorrhaging partners, especially from its transactional group. As the story usually goes, the defections are owed mostly to the younger troops’ dissatisfaction with aging upper management’s refusal to share its power in a meaningful way. In response, the firm’s leadership swears it just ain’t so and demands to know how such gossip could get started about a firm that is notching record-breaking profits. Obviously worrisome to the JB managers is the impact that such rumors, if unchecked, can have on the law firm’s clients as well as its prospective law school recruits and potential lateral hires. Certainly, the extraordinary longevity of the E-rumors inevitably calls into question whether an elite law firm, even one flush with record profits, can afford any longer in today’s fast-paced “new economy” to let such gossip run its course without proactively and publicly countering them. THE JB RUMOR MILL Of course, even the most half-baked rumors have some link to reality. An important local source feeding those rumors plaguing Jenner & Block, the Sept. 25 issue of Crain’s Chicago Business, lists the firm as now having 293 attorneys of all classifications on board in its Windy City headquarters compared to 310 in 1999. That’s roughly a 5 percent drop from one year to the next. In contrast, most, but not all, of Chicago’s biggest law firms listed in the Crain’s survey experienced modest increases in the number of lawyers, including partners, that they employed from 1999 to 2000. Moreover, if one were to check on Jenner & Block’s ranking among the nation’s largest law firms as determined by American Lawyer Magazine‘s annual AmLaw 100 survey, it has, indeed, slipped in recent years; from 52nd in 1998 to 62nd in 1999 and 70th this year. Another focal point of the rumors here is FindLaw’s Infirmation Web site and the related “Greedy Chicago Board,” which bills itself as a bulletin board for law firm associates – or any lawyer, really, who wants to exchange gossip with his or her colleagues. Consider this typical Greedy Chicago posting concerning the state of Jenner on Oct. 15 and calling itself “News is”: “News went around Friday that four more partners will leave after year-end to start their own firm. Seems to be solid info, not just rumor. One is former head of Tech Law group. No news as to whether there are associates who may go with them.” As is most often the case, the exiting Jenner partner was not identified by name or recent position. Nor did the gossip in this instance expose his or her own identity. At least, in response to this provocative bit of information, someone felt compelled to speak out about its anonymous tact, urging the source in a follow-up message to “Be specific about who left.” The response went on to say, ” ‘News is’ is bullshit. Who are they? Why did they leave? Is it good news for JB or bad?” SUSPICIOUS EVENTS FEED OFF ONE ANOTHER Moreover, the JB defection rumor mill was undoubtedly fueled in recent months by a couple of specific, if unrelated, events. First, the firm’s co-chairman, Theodore R. Tetzlaff, 56, was locked in an epic divorce with his estranged wife when the case suddenly made the local papers’ front pages earlier this year. In this instance, there eventually would be anonymous Greedy Chicago postings purporting to reveal that the distracted Tetzlaff began shopping his practice, for instance, to Katten Muchin & Zavis. A spokesperson for KMZ has strongly denied the Tetzlaff rumor. And so has Jerold Solovy, Tetzlaff’s long-time sidekick and the firm’s long-time co-partner in charge. “That’s just so much bull,” he insisted in a recent interview. But, in addition, an article appearing in Crain’s Chicago Business on Feb. 14 focused on the extent of disenchantment among a group of transactional partners at Jenner who have ostensibly been urging the firm to name senior partner and former federal prosecutor Anton R. Valukas, 57, as the heir apparent to the Solovy-Tetzlaff leadership team. The Crain’s article also identifies several key partners who have left the firm in the previous months, including Bruce G. Wilson, 50, who went on to, of all places, Katten Muchin, the rumored next port-of-call for Tetzlaff. THE JB PARTY LINE Obviously concerned about the potential harmful effects such rumors can have on a law firm’s credibility, Solovy agreed to be interviewed on Thursday. The hemorrhaging partners rumors “just ain’t true; they’re made up of whole cloth,” insisted Solovy, adding that any decent lawyer can repackage statistical data with a cynical twist so as to make a witness on the stand — or, yes, a law firm — look bad. Solovy, 70, maintained that any partner defections in the last 12 months are within the normal range of attrition for a firm the size of JB. And, besides, he said, the dip in total firm partners captured in the Crain’s survey is nothing more than a reflection of the fact that he and the firm’s other managers have been consciously trying to ease down the number of partners it has in comparison to the number of associates it employs — so as to improve its admittedly lagging profits-to-partner ratio. Some numbers compiled by American Lawyer Media appear to support Solovy’s claims. In a soon to be published survey by the National Law Journal, for instance, Jenner & Block lists 171 total partners (161 equity; 10 nonequity) at all locations as of this summer, compared to 181 (7 of which held nonequity status) in 1999. Supplemental information supplied to the NLJ by the firm goes on to say that 20 JB associates have been named partner since Sept. 30, 1999, one of which was a lateral hire. Meanwhile, Jenner & Block’s associate attrition rate between the 1999 and 2000 NLJ law firm surveys is 24 percent, a figure considered average for a firm this large. Moreover, reminded Solovy, the firm had perhaps the best year ever last year. And, he said, his goal of improving the firm’s profits-to-partner ratio is paying off. Indeed, data published by the American Lawyer Magazine in its most recent AmLaw 100 surveys, shows that Jenner & Block’s gross revenues included in the 1999 edition were $167,000,000; revenue per lawyer was $465,000; and profits per partner were $415,000. And, in the AmLaw 100′s 2000 edition, the firm’s gross revenues increased to $182,000,000; revenue per lawyer increased to $485,000; and profits per partner increased to $435,000. So, even if partners are not leaving the law firm in droves, what about the gossip of an old-fashioned morale problem among the firm’s transactional attorneys because they have too little say-so in firm affairs? Solovy would not deny that some transactional partners were lobbying for more input into firm affairs. He also conceded that JB’s prodigious litigation practice drives most of the firm’s revenues — and, therefore, much of the firm’s strategic planning. But, Solovy insisted, the transactional group generates big bucks, too, and it does exercise significant influence within the firm’s power structure. Meanwhile, in what has been perceived by some to be an olive branch earlier this year to the nonlitigators, JB’s executive committee was expanded to be more inclusive. THE “GOOD” JB RUMOR Even the ostensibly “good” or neutral rumors concerning JB should not be left unaddressed, Solovy suggested, because they can mislead both firm insiders and outsiders into unwittingly taking action on them for the wrong reasons. For instance, an especially virulent rumor making the rounds, both in the Chicago and in the New York legal communities, is that JB has been in merger talks with the Big Apple’s Fried Frank Harris Shriver & Jacobson. Assured Solovy, “we have had absolutely no conversations” with either Fried Frank or any other large law firm about a merger. But what about the report published by Crain’s in early October maintaining that JB was approaching a “huge fork in the road” as early as early November; that is, a top-level decision as to whether the firm would achieve peace by simply divorcing its discontented transactional types and become an all-litigation entity. Said Solovy: “Our transactional practice is one of the cornerstones of our firm” and it would be “foolish” to let go of a “booming” practice group that helps feed large amounts of business to “our other booming practice group,” made up of trial lawyers. Solovy acknowledged that the firm is reviewing its strategic plan and will submit a revised one to all partners for their input, probably, by the end of November. But, he added, it does so every year like any big law firm that “has its head screwed on straight.” “Our intention is to remain a strong and independent firm. We already have fine transactional and litigation groups. But, yes, of course, we will take, in a moment, any proposal that lets us build on these strengths,” for instance, through lateral hires. And yet, such assurances from even the man at the top have not been enough to quell the contrarian JB rumor mill and its potential, if not real, impact on the firm’s business affairs. For instance, one anonymous stargazer opined recently, in reply to a request for ideas on a planned lateral career move to Jenner & Block: “Great idea. It is also a good time to move to Lebanon, Israel, Congo, Yugoslavia, East Timor and Ethiopia.”

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